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Beyond the Rule of Law: Civic Virtue

and Constitutional Structure

Richard A. Epstein*

L The Rule of Law: Necessary but not Sufficient

The "rule of law" is an ancient and honorable theme in both
political theory and American constitutional law. It is widely
praised, especially when it is set in opposition to the "rule of men,"
and for good reason. To attack the rule of law is to risk condemning
ourselves to the arbitrary power of other individuals, who may be
bound by nothing more than their own endless capacity for selfinterest and personal gratification. The downward cycle of Hobbes's Leviathan, captured so well in the phrase "the war of all against
all," may overstate the disarray and chaos that will emerge when the
rule of law is systematically ignored. But if Hobbes is wrong, it is
only as a matter of degree. When two opposing forces are equal,
the defense normally has an advantage over the offense - which is
why mutual deterrence has worked, however fitfully, in the age of
nuclear arms dominated by two superpowers, the United States and
Russia. It is therefore possible that the state of war of all against all
could settle down from time to time into the guarded truce that
characterizes so much of international relations where there is no
common sovereign to resolve disputes between nations. But the
peace is always uneasy, and the resources, so massively consumed to
* James Parker Hall Professor of Law, The University of Chicago. Much of the
thinking about this Article developed out of a National Endowment for the Humanities
seminar, "The Genius of the Constitution," that I co-led this summer with Professor
Timothy Fuller of Colorado College. Michael McConnell and Cass Sunstein provided
instructive criticism on an earlier draft of this Article. Andrew Josef and Sean Smith
provided valuable research assistance.
November 1987 VoL 56 No. I
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149

ensure that self-defense remains a credible threat, are necessarily

deflected from other productive activities.
It is just this international impasse that ordinary civil society is
able to avoid. The basic idea of the social contract - stripped of its
excessive reliance upon the idea of individual and tacit consent - is
that each person surrenders (or, more accurately, is made to surrender) his right to use force (and fraud) in exchange for protection
from the force (and fraud) of other individuals. The security thus
gained will exceed in value the liberty that is surrendered, and everyone (or almost everyone)I will be better off because of the great
social exchange into which they all have been made to enter
simultaneously.
There is of course no real grand social alliance. Still the hypothetical contract retains its intellectual allure notwithstanding efforts
to banish it from political discourse. The sheer number of human
beings, with their very different attitudes and preferences, cannot be
expected to reach any agreement on any subject, let alone one so
fundamental. Precisely because of these difficulties, the Hobbesian
problem remains, if anything, more intractable. The best we can do
therefore is develop a logical construct that explains how, if the conditions for voluntary contracting - such as simultaneity and low
transaction costs - could be satisfied, all individuals would find
themselves rationally impelled to join into political association and
would agree to be bound by its terms. That task in turn requires
that one explain the anticipated returns that individuals will have,
first, if they choose to stay outside some social contract, and, second, if they choose to join it. The enterprise is unambiguously successful only if it can demonstrate that everyone's individual returns
from joining will necessarily dominate their returns from remaining
outside society in all states of the world. The great contribution of
Hobbes is to paint so grim a picture of unorganized political life that
the general claim becomes credible even to the most stubborn in
our ranks. The logic of his position drives everyone toward political
association, and through it toward the rule of law - a body of gen1. This last caveat could lead to a learned dispute about the various criteria of
social welfare that might be used to evaluate the hypothetical move from natural to civil
society. If indeed every person were better off within civil society than outside it, then
there would be a strong justification for the political order that corresponds to the
Pareto standards of social welfare, that is, where each person in state 2 (civil society) is at
least as well off as he is in state 1 (nature). If that condition were indeed satisfied, then
the case for collective governance is clear. But it may well be that there is some person
or small group of persons who are better off without government than with it. If so,
then political order can bejustified only by the somewhat weaker Kaldor-Hicks criterion

which stipulates that state 2 is better than state 1 if and only if the winners in state 2 can
afford to compensate the losers fully and still remain better off themselves.
John Rawls's use of the "veil of ignorance" marks an effort to collapse the two tests. If
no one knows his place in nature then he will opt for that social order that will leave the
single h)potheticalchooser better off than any other. The point behind the method is that
it allows the analyst to escape the hold-out problem that otherwise exists when unanimous consent is needed to form a civil society. Yet by the same token it ignores the very
real differences in tastes and attitudes that surely exist in the world at large, and it provides no reliable guide as to what formal function identifies the ideal single person from
the welter of individuals in the world at large.
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Epstein
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eral and formal principles that public officials exercising sovereign

authority can use both to resolve disputes between citizens and to
justify the use of force.
The formal elements of the rule of law are well captured in the
famous definition provided by A.V. Dicey in The Law of the Constitution.2 In Dicey's view the rule of law was closely associated with the
virtues of the English Constitution - Dicey was quite suspicious of
written constitutions, like ours, with grand statements of theory.
But his position has implications that dearly extend beyond it. The
first component of the rule of law is quite general. Speaking of the
rule of law, he says: "It means, the first place, the absolute
supremacy or predominance of regular law as opposed to the influence of arbitrary power, and excludes the existence of arbitrariness,
of prerogative, or even of wide discretionary authority on the part of
the government." 3 Dicey then adds two further conditions, "equality before the law, or the equal subjection of all classes to the ordinary law of the land administered by the ordinary Law Courts,"
which he then takes to exclude broad administrative law, especially
as it had developed on the continent in his own day.4 And last that
"with us [under] the law of the constitution, the rules which in foreign countries naturally form part of a constitutional code, are not
the source but the consequence of the rights of individuals, as defined and enforced by the Courts." 5
In an instructive turn of history, Dicey's definition has been
picked up by Friedrich Hayek, 6 where it serves as the basis for
Hayek's attack on socialist planning, whose broad discretion is inconsistent with the need for 'formal rules" that the rule of law requires. 7 As Hayek writes:
The distinction we havejust used between formal law orjustice
and substantive rules is very important and at the same time most
difficult to draw precisely in practice. Yet the general principle
involved is simple enough. The difference between the two kinds
of rules is the same as that between laying down a Rule of the
Road, as in the Highway Code, and ordering people where to go;
or, better still, between providing signposts and commanding
people which road to take. The formal rules tell people in advance what action the state will take in certain types of situation,
defined in general terms, without reference to time and place or
2. See A. DICEY, INTRODUCTION TO THE STUDY OF THE LAW OF THE CONSTrrUTION
(7th ed. 1907). The text is the last that Dicey himself revised.
3. Id. at 198.
4. See id
5. Id at 199. In a sense therefore Dicey seems to count as a friend of judicial
review, but not because he liked written constitutions.
6. See F. HAYEK, THE ROAD TO SERFDOM 72 n.1 (1944).
7. See id. at 73.

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particular people.8

There is no question that the rule of law is a necessary condition

for a sane and just society. The fear of discretion that is shared by
both Dicey and Hayek is well grounded by the more explicit modem
treatment of property rights, which shows that ill-defined property
rights lead to legislative intrigue, political favoritism, and massive
uncertainty, all of which tend to reduce the levels of both liberty and
utility. But if the rule of law, as defined, is necessary for a just and
sound society, it is a very different question to ask whether it is suffident to achieve that result. In one sense it would be desirable that
the answer were yes, for then it would be possible to make judgments about sound social arrangements solely by noting some easily
observable marks of formal laws. Nonetheless I think that Dicey and
(the early) Hayek were too optimistic in thinking that the rule of law
in and of itself offered sufficient protection for the just social order.

Some rule of law is better than no rule of law. But the choice of the
best, even the best achievable, form of political organization demands more than faithful adherence to the rule of law can provide.

There are many, wholly different, legal systems that have all the
marks of the rule of law. It is very easy to tell which commands are
indeed those of the sovereign and which are bogus. The rules themselves may well be very general in both form and content. The principles used to organize Nazi Germany (an issue that rightly obsessed
Hayek) met in some formal sense the requirements of the rule of
law. The citizen could easily figure out that they were authored by
the sovereign and written with a high degree of generalization. A
rule that says that all Jews must wear a yellow star has the same
generality and clarity as one that says that all Jews are entitled to
exemption from military service on the Sabbath. But there the simi8. Id. at 74. Note too that Hayek also condemned the broad discretion conferred
upon English administrative agencies. See idat 62-63. This same theme was at issue in
the United States at the same time. Contrast with Hayek the following excerpts from a
Frankfurter Court opinion in National Broadcasting Co. v. United States, 319 U.S. 190
(1943):
The [Federal Communications] Act itself establishes that the [Federal
Communications] Commission's powers are not limited to the engineering
and technical aspects of regulation of radio communication. Yet we are
asked to regard the Commission as a kind of traffic officer, policing the wave
lengths to prevent stations from interfering with each other. But the Act
does not restrict the Commission merely to supervision of the traffic. It puts
upon the Commission the burden of determining the composition of that
traffic. The facilities of radio are not large enough to accommodate all who
wish to use them. Methods must be devised for choosing from among the
many who apply. And since Congress itself could not do this, it committed
the task to the Commission.
Id. at 215-16. Justice Felix Frankfurter then went on to hold that the "'public convenience, interest, or necessity" standard of the act furnished the Commission with sufficient guidance for its task. Id. at 216 (quoting 47 U.S.C. 303 (1940)). It is a striking
confirmation of Hayek's thesis that the licensing program of the Federal Communications Commission proved a total failure once it moved beyond its traffic-cop function.
The seminal criticism (in this small world) was by R.H. Coase, who noted that scarcity
was not a reason for government allocation, but for governments to define property
rights so that private (and public) parties could bid for the frequencies in a market system. See Coase, The FederalCommunications Commission, 2 J.L. & EcoN. 1,14 (1959).

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Epstein
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larity ends. The hard questions of social organization involve more

than generality and clarity. And if it be thought that the reference to
Jews makes the law one that deals with "particular persons," the
problem still does not go away. Most good statutes do not govern
the entire population equally. And even those that do can be troublesome in the extreme. A rule that says "all persons over eighteen
may marry" has no greater generality than one that says "no persons over eighteen may marry." Yet while the former is an essential
component of our civil liberties, the latter is totalitarian excess,
made all the more dangerous by its uncompromising clarity and
generality.
The limitations of formality and generality as tests of good laws
are reinforced by the lessons of modem constitutional adjudication.
Everyone today agrees that rules that single out special classes for
explicitly different treatment are likely to run afoul of the rule of
law. It is for that reason that modem lawyers are justly suspicious of
rules that use race, sex, or religion as the explicit grounds for the
classification of individuals. A deep suspicion, however, is sufficient
only to give rise to a rebuttable presumption against the law's fairness, but not a conclusive one. There are certain rules that distinguish between men and women that many individuals would
considerjust because they work to the long term advantage of members of both sexes. A rule that calls for separate men's and women's
tennis teams is one such example. There are other such rules, however, that seem to have precisely the opposite effect, such as a rule
that excludes women from the practice of the learned professions,
or that imposes upon women special, so-called protective conditions
not applicable to men.
Similarly there are many rules today that are neutral on their
faces, but which have disparate impacts upon men and women, or
blacks and whites. The modem literature on regulation has as one
of its central themes implicit transfers through regulation. Central
to this literature is the way in which a single rule, neutral on its face,
may disadvantage one group at the expense of another. Thus rules
that require fixed expenditures from large and small firms will often
discriminate against small firms because they will have fewer units of
production over which to spread fixed costs. Taxes on labor may
well provide an advantage to firms taxed over their rivals if the former firms are capital intensive in their operations and the latter are
labor intensive. 9 Minimum wage or maximum hour laws have disparate impacts that are disruptive to the very competitive order that
Hayek wished to defend, even though they conform to the rule of
9. See Doernberg & McChesney, On the Accelerating Rate and DecreasingDurability of
Tax Reform, 71 MINN. L. REv. 913, 927 (1987) (stating that "[a] tax can be beneficial to

some private producers if it strikes their competitors even harder").

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law. Yet note what Hayek wrote: "To prohibit the use of certain
poisonous substances, to limit working hours or to require certain
sanitary arrangements, is fully compatible with the perservation of
competition."' 0 Yet the risks that so-called neutral health laws have
upon competition were a threat well understood at the time of Lochner v. New York," and they have been documented extensively in 2the
modem regulatory work dealing with agencies such as OSHA.1
There is therefore a clear need to go beyond the form of a law to
decide whether it is just or wise, and a normative theory of human
behavior and political irrtitutions is needed to explain why Dicey's
and Hayek's intuitions about markets and government power, for
example, are correct. There are no shortcuts in the process. Too
much weight therefore is placed upon the rule of law to filter out
good from bad legal rules. Hayek may have wished to contrast the
rule of law with substantive rules, but his distinction does not hold
true. All laws, general and specific, have an irreducible substantive
component. A rule of law that allows the sovereign, be it king or
legislature, to generate any clear command that it likes is not a very
attractive system, even if it is, as Hobbes argues, better than one in
which all forms of individual license are subject to no external constraint. The harder question therefore is how does one choose
among different types of legal orders, all of which satisfy the formal
requirements of the rule of law. The answer to that question again
drives us beyond the rule of law, to the foundations of political theory and modern constitutionalism.
II.

Beyond the Rule of Law

It should be of little surprise that the modem developments of

political theory rest heavily upon the work of Hobbes. Subsequent
writers may reject the absolutism implicit in Hobbes. But Hobbes's
absolutism did not rest upon a theory of the divine right of kings or
the mere assertion of naked power. Instead it rested upon the consent of the governed, the identical ground used (if not overused) by
10. F. HAYEx, supra note 6, at 37.
11. 198 U.S. 45 (1905). The precise issue in Lochner was whether New York's maximum hour statute was "labor" or "health" regulation. The intuition behind the distinction is that labor statutes have anticompetitive purposes, and health statutes do not.
The Lochner Court was right on the first point and probably oversimplified on the second, as there can be enormous implicit transfers through regulation by health and safety
statutes. See infra note 12.
12. See Bartel & Thomas, Direct and Indirect Effects of Regulation: A New Look at OSHA's
Impact, 28 J.L. & ECON. 1 (1985).
Among the direct effects of OSHA are improvements in safety for workers
and increases in manufacturing costs that decrease profits and wages.
Alongside these direct effects, however, are the general equilibrium "indirect effects" - the competitive advantages that arise from the asymmetrical
impacts of regulation among different groups of firms and workers.... It is
extremely important to recognize that, for many firms and workers, the indirect effects of regulation can outweigh the direct effects in economic importance. If the competitive advantage gained through indirect effects is
sufficiently large, it can more than offset any direct costs, producing a net
benefit for the regulated firm and its workers[,]
id. at 3, and, I might add, substantial losses for everyone else.

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subsequent democratic theorists who have rejected the case for his
undivided, absolutist sovereign. These theorists have sought to find
need for the sovereign to maintain a system of
ways to recognize ' the
"ordered liberty,"' 3 one that simultaneously skirts the risks of the
war of all against all and the alternative risks of vesting absolute
power in a monolithic, possibly despotic, Hobbesian sovereign.
The concern with Hobbes's own alternative rests with the very
sensible objection that although many absolute sovereigns may be
well-intentioned rulers, some will not. As a rough empirical generalization, the prosperity and tranquility that good rulers can afford
will not normally be sufficient to compensate for the reign of terror
that bad despots can impose. A bull market on the New York Stock
Exchange does not compensate for terror, imprisonment and death.
The issue then is what kinds of devices can be used to counteract
the authority of the sovereign once we move into civil society. In
our political literature two devices have been proposed, and these
explain the title of this Article. The first of these is some idea of
civic virtue, and the second is structural safeguards against the concentration of power. I shall talk about each briefly.
The idea of civic virtue is an elusive one, and I for one am not
quite sure I understand the complex constellation of ideas that lurks
beneath its surface. But whatever its precise contours, civic virtue
surely was an important concern in political theory both before and
during the framing of our constitution, and it has had a sudden return to prominence in modem academic circles. 1 4 The modem discussions of civic virtue have directed renewed attention to the work
ofJames Harrington, 15 who, writing in response to Hobbes, found
in civic virtue an antidote, imperfect perhaps, to unrestrained greed
and self-interest. Individuals must be raised in a civil society where
they are taught to understand that their own individual wills and
desires must be subordinated to those of the larger society. If many
individuals learn to behave in this way, then they can develop into a
sufficient critical mass, which will form an effective counterweight to
the arbitrary power of wayward government officials. Closely akin
to civic virtue therefore is the idea of extensive general "participa13. The phrase isJustice Benjamin Cardozo's in Palko v. Connecticut, 302 U.S. 319,
325 (1937), but the problem both precedes and survives his efforts to resolve it.
14. See Michelman, Foreword: Traces of Self-Government, 100 HARV. L. REV. 4 (1986);
Sunstein, Interest Groups in American Public Law, 38 STAN. L. REV. 29 (1985).
15. Harrington lived from 1611 to 1677, and his most famous work, The Commonwealth of Oeana, was written in 1656, five years after the appearance of Hobbes's Leviathan. Oceana was Harrington's mythical name for England. For a selection of
Harrington's writings, seeJ. HARRINGTON, THE POLITICAL WRITINGS OFJAMES HARRINGTON: REPRESENTATIVE SELECTIONS (C. Blitzer ed. 1955) [hereinafter HARRINGTON, W=inINGs]. For an exhaustive compilation of Harrington's work, see J. HARRINGTON, THE
POLITICAL WORKS oFJAMEs HARRINGTON (J. Pocock ed. 1977) [hereinafter HARRINGTON,
WORKS].

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155

tion" in public governance by individuals drawn from all orders of

society, with the idea that they will in turn (by "rotation") be part of
the ruling body, and part of the general citizenry that will keep an
eye on the rulers that govern them.' 6 The notion of civic virtue did
not in its early days carry with it the implication that all individuals
had the same capacity, temperament, or training for governance.
Quite the opposite, civic virtue went hand in hand with the view that

there was a natural aristocracy, recognizable to all men, the members of which were endowed with more of the right stuff than
others. 17

The appeal to civic virtue, moreover, was hardly libertarian in its

orientation. Condemnations of luxury, sloth, and excess were very
much a part of the tradition, for men who had grown soft with selfindulgence would lack the character necessary to enable them to
participate in public affairs and the defense of the commonwealth.
The country was preferred to the court, 18 just as it appears that the
regimentation of Sparta was preferred to the laxity of Athens.' 9 Military service was an essential duty of citizenship. The authoritarian
and elitist elements of the position are plain, and not easily
20
ignored.
In order to preserve civic virtue, more than exhortation was required. Certain structures were necessary, at least for Harrington.
These concerned both the general structure of society and the particular forms of governance. As regards the first, Harrington, for
example, was not an egalitarian, for such would have been inconsistent with his own belief in distinct social classes, each with its own
16. See HARRINGTON, WRITINGS, supra note 15, at 71.
Equal rotation is equal vicissitude in government, or succession unto magistracy conferred for such convenient terms, enjoying equal vacations, as take
in the whole body by parts succeeding others through thefree election or suffrage of the people.
The contrary whereunto is prolongation of magistracy which, trashing the
wheel of rotation, destroys the life or natural motion of a commonwealth.
17. Harrington himself makes the pungent observation that:
in truth an army may as well consist of soldiers without officers or of officers
without soldiers, as a commonwealth, especially such a one as is capable of
greatness, of a people without a gentry or of a gentry without a people....
There is something first in the making of a commonwealth, then in the governing of her, and last of all in the leading of her armies, which, though
there be great divines, great lawyers, great men in all professions, seems to
be peculiar to the genius of a gentleman.
Id. at 74. The emphasis upon the military is no accident, for participation in military life
was one key obligation of the citizen. The issue of standing armies and the militia
bulked very large in The FederalistPapers.
18. "For, in the way of parliaments, which was the government of this realm [that is,
Oceana, or England], men of country lives have been still entrusted with the greatest
affairs, and the people have constantly had an aversion from the ways of the court ....
Id- at 37.
19. "Whereas commonwealths upon which the city life has had the stronger influence, as Athens, have seldom or never been quiet, but at best are found to have injured
their own business by overdoing it." Id.
20. "Moreover, elements of traditional republican thought are quite unattractive especially its militarism and its acceptance of class hierarchies, manifested by the limited
classes of people entitled to wield political influence." Sunstein, supra note 14, at 30 n.8.
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unique function. Nonetheless, his concern for "overbalance" led

him to believe that there should be a sufficient dispersion of wealth
and property, so that no small group of individuals would be sufficient to overpower the rest.2 1 Toward that end he proposed, in a

way that sharply distinguishes him from Locke, to place restrictions

on both the inheritance, and, especially, the acquisition of additional
lands 22 - but these restrictions fall short of requiring the complete
equality of wealth across all citizens.
More to our point here, Harrington's concern did not center
solely on the relationship between broad social structures and the
ideal system of political sovereignty. In addition, Harrington was
concerned at a more concrete level with developing a set of institutional structures that could allow an escape from the Hobbesian solution of undivided sovereignty. 23 In his own formulation, "[ain
equal commonwealth... is a government establishedupon an equalAgrarian,
arisinginto the superstructuresor three orders: the senate debatingandproposing, the people resolving, and the magistracy executing by equal rotation
'2 4
through the suffrage of the people given by the ballot."

What is important to note is that these structural reforms are in

fact themselves independent of the conception of civic virtue, which,
however important it is, is not sufficient to counteract the constant
threat that individual self-interest poses to the common good. Thus
there are many passages in Harrington that echo the grim assessment of human nature that is found in Hobbes. Harrington writes:
"For be the interest of popular government right reason, a man
does not look upon reason as it is right or wrong in itself, but as it
makes for him or against him."' 25 And again: "The wisdom of the

few may be the light of mankind, but the interest of the few is not the
'26

profit of mankind, nor of a commonwealth.

This preoccupation with self-interest as a threat to the body politic becomes especially clear from the decisive illustration that Harrington uses to derive the structural division between the senate
proposing and the people resolving. His basic analogy is to the
21. "An equal Agrarianis a perpetual law establishing and preserving the balance of
dominion by such a distribution that no one man or number of men within the compass
of the few or aristocracy can come to overpower the whole people by their possessions
in lands." HARRINGTON, WRrrINGs, supra note 15, at 71.
22. The restrictions included those that prevented a person who had land valued in
excess of 2,000 pounds both from leaving it to a single son where division among sons
was possible and from acquiring new lands, except by inheritance, valued in excess of
that same sum. See HARRINGTON, WORKS, supra note 15, at 62-63.
23. He unmercifully criticizes Hobbes, who had published Leviathan just five years
before, for his monarchial tendencies and his willingness to place the sovereign above
the law. See HARRINGTON, WRITINGS, supra note 15, at" 60-61, 67, 69.
24. Id. at 71-72. This sentence links together both Harrington's broad social con-

cerns and his insistence upon structure.

25. Id. at 57.
26. I-at 60.

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common game "known even to girls."'27

For example, two of them have a cake yet undivided which was
given between them that each of them therefore may have that
which is due. "Divide," says one to the other, "and I will choose,
or let me divide, and you shall choose." If this be but once agreed
upon, it is enough, for the divider dividing unequally loses in regard that the other takes the better
half. Wherefore, she divides
28
equally and so both have right.

In this passage Harrington appears not as the champion of civic

virtue, but as the precursor of the modem public choice theorists.
His cake game is a way to harness the demands of self-interest to the
achievement of a social objective. The object here is the equal division of the cake. If the same person who cut, chose, then self-interest would lead to an unequal division, if there were any division at
all. But making one divide and allowing the other to choose, subject
to caveats to be mentioned, ensures an equal division of the cake,
for the first girl only maximizes her share by the equal division,

given her knowledge that the other girl will choose the larger part if
the cake is not divided in equal halves. The self-interest of each side
is now made to operate under a set of constraints that dictates
movement toward the socially desirable outcome.2 9 There is not
only the rule of law, but there is also the right rule of law.
Yet note that there are substantial difficulties that lurk in the use
of this game for understanding divided sovereignty. In the first instance the game need not always yield the right result. Assume, for
example, that some error is possible both in the cutting of the cake
and the judging of the size of the pieces. The first alone means that
the two pieces are not of equal size, so that the imperfect ability to
execute a mechanical task will in part frustrate the ideal of equal
division, self-interest notwithstanding. In addition, given the presence of error costs, it now makes a difference whether a given person goes first or second. Here we can assume, empirically, that it is
harder to cut than to judge, just as it is harder to play the piano than
to compare the talents of two pianists. It follows therefore that each
of the two participants in the game has a clear incentive to do the
judging and not the cutting. It is highly likely both that the two
pieces will not be of equal size and that the second girl will be able
to spot the difference and choose accordingly. The easy benevolence of Harrington's dialogue will not survive the rigors of the
world. Indeed if the game is a one-shot affair, some inequality will
have to be accepted, even if lot is used to determine which girl goes
27. Id. at 58.
28. Id.
29. J.G.A. Pocock says this game "ensures that neither has an interest in behaving
unjustly, with the consequence that each girl helps the other maintain the supremacy of
reason over passion. Each not only gets her fair share of the cake, but receives the
greater good of having acted virtuously." HARRINGTON, WORKS, supra note 15, at 65.
Pocock's formulation places too much emphasis upon virtue and reason. The point of
the game is to make sure that self-interested players get the right result even when they
act out of passion and not virtue. The virtue belongs to the person who designed the
game, not to the girls who play it.
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first. Ironically, however, if the game is repeated, then the girls can
take turns going first, so that on analogy by Harrington's own principle of rotation they can approach equality in the long term. The
lesson is important, for with imperfect information, the perfect incentive-compatible rule (that is, the first player in the exercise of his
own self-interest does that action that advances the social interest)3 0
does not yield the ideal result. But lest we despair, this rule is still
clearly superior to alternatives that might be put into its place.
The second point is that the simple example does not easily generalize to games that involve more than two people. Thus suppose
one wants to use the rule to divide a cake into three equal slices.
The only way that this can be achieved is to have one player make all
the cuts, and then to allow the other players, in an order chosen at
random, to select their pieces, leaving to the cutter the last piece. If
there are no side agreements among the players, the first player
knows that if any one piece is smaller than the rest, she will get it, so
the incentive is to keep all pieces the same size. This procedure is
subject to all the caveats about error costs raised above, and has in
addition the odd feature that only one person can do the cutting if
the game is to work at all.
The moment two or more players are allowed to cut, the possibilities of strategic misbehavior are clearly introduced. Take a game
with three players and three slices of cake, in which the first to cut is
the last to pick, the second to cut is the second to pick, and the third
player does not cut, but picks first. If the first player cuts the perfect
third, then the second player (who will pick second) is undisciplined
in the way in which she wields the knife. She can cut unequal slices
if she so chooses, knowing that she can always take the one-third
already cut, leaving to the last player (who will pick first) the largest
slice of the cake. The expanded game therefore severs authority
from the consequences of authority and always places the first
player at the mercy of the second - the very result Harrington
feared.
This difficulty cannot be forestalled by having the first player cut a
slice either greater or less than the perfect third. If the slice is cut
larger, then the third player will pick it unless the second division is
so unequal that it yields a still larger piece. If the first player cuts a
slice smaller than a third, then the even division of the uncut portion
will yield both the second and third players larger shares than the
first. These possibilities of strategic behavior multiply when the
game goes from 3 to n players. The only rule that tends toward
equal slices is one that directs the first player to cut all of the slices.
30. For a further elaboration of the role of this principle in the general law of tak-

ings, especially as it applies to the disproportionate impact tests, see R. EPSTEIN,

INGS: PRIVATE PROPERTY AND THE POWER OF EMINENT DOMAIN ch. 14 (1985).

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TAK-

Politics of course is far more complicated than a game that simply

divides a given cake. Harrington's game, for example, presupposed
that the undivided cake "was given between them that each of them
therefore may have that which is due." 3 ' The word "given" requires special attention because it implies that some previous owner
of the cake set the goal of equal division before the game began.
That goal was not internal to the game itself. The theory of divine
rights in politics can be understood in part as an effort to insert a
universal donor into all discussions of property rights3 2 - a perspective easily lost sight of in a secular age.
The object of the true political game therefore can never be set
for the players by an outsider who owns the cake that is to be divided. Instead the objective must be set by the players collectively,
as part of the game. Now insisting upon the equal division of wealth
among all persons, regardless of their level of social contribution,
raises so many manifest difficulties - perverse incentive on production and massive centralized planning are two - that, even with serious qualification, such equality cannot be regarded as the object of
the game. Instead the goals of the social game are far more difficult
to articulate when the cake is not "given," but instead must be created by human endeavors.
Harrington eschews any systematic effort to establish the relationship between the economics of production and those of redistribution. The want of any clear substantive vision (which is what makes
him a lesser thinker than Locke) drives Harrington away from substantive rights to administrative procedures.33 Knowing full well of
the complexity of politics, Harrington accordingly develops his
more complex governance structure with the senate proposing and
the people resolving. Yet here we do not have any simple two-party
game, for this new structure raises a whole host of problems, unanswered by Harrington and difficult to answer today. Thus the division within the senate presupposes that it must have some internal
decision rule (for example, majority rule) before it can propose, and
the same is true of the people before they can resolve. It follows
therefore that Harrington oversimplifies when he treats the cake
game as though it sets the model for deliberative politics.
The senate then having divided, who shall choose? Ask the girls.
For if she that divided must have chosen also, it had been little
31. HARRINGTON, WRITINGS, supra note 15, at 58.
32. "The earth therefore, and all things therein, are the general property of all mankind, exclusive of other beings, from the immediate gift of the creator." 2 W. BLAcKSTONE, COMMENTARIES *3.

33. The same pattern can be found in modern administrative law, where dominance
of the New Deal view has meant that there are no vested property rights that are immune
from comprehensive social regulation. That having been decided, the emphasis then
shifts to the administrative procedures that might be introduced to constrain the behavior of the legislators and administrators who operate within the capacious confines of
the majority will. But in general these efforts will fail precisely because they are not
animated by any substantive vision of what the just society looks like. For the most
comprehensive effort to rationalize the difficulties in modern administrative law, see
Stewart, The Reformation of American Administrative Law, 88 HARV. L. REv. 1667 (1975).

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worse for the other in case she had not divided at all but kept the
whole cake to herself, in regard that, being to choose too, she divided accordingly. Wherefore if the senate have any further
34
power than to divide, the commonwealth can never be equal.

The contrast between this structure and the two-party cake game
is stark and complete. The cake game was designed to be immune
from all possibility of strategic behavior and achieves just that result
if the cake can be cut precisely in two. The division between the
senate and the people opens up vast horizons on which indeterminate political struggles - bilateral monopoly problems again - can
take place, even on Harrington's own relatively simple model in
which twenty representatives divide themselves (it is never dear
how) into six senators and fourteen representatives for the people.
Initially there can be disagreement among the senators over what to
propose or among the people over what to accept. Even in the unlikely event that both the senate and the people are unanimous in
their separate views, there could be serious struggles between them,
as each has a blocking position against the other. In the cake game
there is a clear advantage to being the chooser and not the cutter.
Yet it is unclear whether the people have greater power than the
senate, and probably it is likely that the reverse is true, given that
the people, even if unanimous, will not reject a senate proposal if
their own costs in getting a better proposal adopted exceed any advantage that they hope to achieve from jockeying. 35 Harrington's
probable implication from the cake game - that an asymmetrical
division of power between two branches of a legislature can work as
smoothly, or even nearly as smoothly, as the cake game - is wholly
incorrect. Yet here, as everywhere in political life, the best cannot
be the enemy of the good. Any criticism of Harrington's analogy
between cakes and governments does not show that the division of
sovereign power is unwise or unattainable. Indeed we know from
34. HARRINOTON, WRITINGS, supra note I5, at 59-60.
35. Thus take a game in which there is an array of different canned goods. One
player can break them into two piles and the second player picks the pile of his choice.
Is it better to divide or to pick? Here, if the first player knows the subjective preferences
of the second it is better to divide. The winning strategy exploits the difference between
market and subjective value. Thus the first player creates two piles. One pile may have a
market value of 45, a subjective value of 40 to that first player, and a subjective value of
60 to the second player. The second pile may have a market value of 55, a subjective
value of 70 to the first player, and a subjective value of 55 to the second player. If we
rule out the possibility of trade after the division, then the second player will take that
package with the higher subjective value to her (60 to 55), that is, the first pile, even
though the first player then is left better off than the second (70 to 60). If there is the
possibility of trade after the division, then the second player may take the other pile and
then hold out to secure the goods she desires most. Note also that in the limiting case
where the subjective values of the two players are identical, the first player cannot win.
Yet in practice the difference between the objective and subjective values is likely to be
large. If two patrons ofa supermarket each spend fifty dollars on groceries, neither will
be pleased if she takes home the groceries of the other by mistake.

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the structure of churches, condominiums, and corporations that

purely private associations, founded on unanimous consent, will invest heavily on complex governance structures. And governments,
which bind without unanimous original consent, are faced with far
more exacting tasks because the greater dispersion of tastes among
their citizens increases the risk that the holders of public office will
misuse their positions for private ends. Given that governments are
formed without unanimous consent of the governed, they require
even more stringent procedural safeguards than any analogous private organizations - which is one more reason why their functions
should be limited as sharply as possible. Concern with the rule of
law may drive us toward some division of power, but in and of itself
it does not indicate which division of power is ideal.

III.

ConstitutionalRepublicanism

Both these strands of Harrington's republicanism - civic virtue

and constitutional structuralism - have been incorporated into the
analysis of American constitutional law. Again, their relationship
raises the same hard issues that it did for the earlier writers. The
efforts, partial and incomplete, to resolve the apparent tensions are
well apparent in the most famous of The FederalistPapers - number
10, where Madison addresses the problem of "factions," whether of
minorities or majorities, that besets any system of representative
government. Initially it is important to stress why factions are a
problem, for it brings to the fore an element that is largely suppressed in Harrington's analysis of republicanism. For Madison,
factions were a threat to the liberty and property that all governments are designed to protect. In reaching this conclusion Madison
dearly was heavily influenced by the Lockean conception of the
proper ends of government.3 6 Equally important, his view on this
question of ends does not differ from that of his opponents, the
Anti-Federalists, who believed that the government should serve
these same ends.3 7 In modern terms, both the Federalists and the
36. Thus in The Federalist No. 1 Hamilton sets out the aim of the series of papers:
"The conformity of the proposed constitution to the true principles of republicangovernment - Its
analogy to your own state constitution - and lastly, The additionalsecurity, which its adoption will
afford to the preservation of that species ofgovernment, to liberty, and to property." THn FEDEALisT No. 1, at 7 (A. Hamilton) (J. Cooke ed. 1961). Hamilton returns to that same theme
in The FederalistNo. 85, where he states the proposition as "the additional security which
[the Constitution's] adoption will afford to republican government, to liberty, and to
property." THiE FEDERALIST No. 85, at 587 (A. Hamilton) (I. Cooke ed. 1961). Similarly
when Madison argues against a small pure democracy in The Federalist No. 10, he notes
the risks of majoritarian pressures: "Hence it is, that such democracies have ever been
spectacles of turbulence and contention; have ever been found incompatible with personal security, or the rights of property; and have, in general, been as short in their lives
as they have been violent in their deaths." THE FEDERALIST No. 10, at 61 (A. Hamilton)
(J.Cooke ed. 1961).
37. The Anti-Federalist defense of the small republic also was in service of Lockean
ends. Herbert Storing, the master historian of the Anti-Federalists, quotes Luther Martin at Philadelphia:
At the separation from the British Empire, the people of America preferred
the Establishment of themselves into thirteen separate sovereignties instead
of incorporating themselves into one: to these they look up for the security
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Anti-Federalists were far, far closer to the nightwatchman than to

the welfare state.
The difference between the two sides is largely, if not purely, instrumental.38 Madison wrote after a long tradition that spoke about
the risk that "corruption" posed to the operation of all political institutions. Madison's task, as he saw it, was to show that the union
proposed by the Constitution was able to withstand this coriuption
and the ravages of time better than could any alternative constitution. This proposition could be maintained only by a showing that
the extended federated republic better protects property and liberty
from factions than do the small republics - that is, the states, which
then had charge of this function.3 9 His arguments therefore are of
necessity directed toward a set of practical and concrete issues that
were nowhere addressed by the earlier political writers. Hobbes,
Harrington, and Locke are as one in their abstract deliberations on
the emergence of government from the state of nature. None of
them considered how the ideas of social contract applied to sovereign states that sought to form a national government.
In order to make the case for his extended republic, Madison then
of their lives, liberties, & properties: to these they must look up - The
federal Govt. they formed, to defend the whole agst. foreign nations, in case
of war, and to defend the lesser States agst. the ambition of the larger.
H. STORING, WHAT THE ANTI-FEDERALISTS WERE FOR 15 (1981). Martin's reference to
"lives, liberties, & properties" is vintage Locke, whose formulation referred to "their
lives, liberties and estates, which I call by the general name - property." .J.LOCKE, OF
CIVIL GOVERNMENT, second treatise, ch. 9, 1123 (W. Carpenter ed. 1924).
38. Storing makes just this point when he observes that when he began his study of
the Anti-Federalists he expected to find that they embraced a view of "republicanism"
as:
a secularized Puritanism aimed at securing a sacrifice of individual interest to
the common good. One of my own reasons for turning to the study of the
Anti-Federalists was the expectation that they defended some such tradition;
the Anti-Federalists seemed to be of interest as defenders of at least residual
principles of premodern, preindustrial, preliberal worlds. Yet, without here
taking up the more complex question of how far such principles may in fact
have been involved in Revolutionary republicanism, they are strikingly absent from Anti-Federalist thought. The Anti-Federalists are liberals - reluctant and traditional, indeed - in the decisive sense that they see the end
of government as the security of individual liberty, not the promotion of
virtue or the fostering of some organic common good. The security of liberty does require, in the Anti-Federalist view, the promotion of civic virtue
and the subordination (not, in the usual case, "sacrifice") of individual interest to common good; but virtue and the common good are instrumental to
individual liberty, and the resemblance to preliberal thought is superficial.
H. STORING, supra note 37, at 83 n.7 (citation omitted). In short, little of Harrington's
conception of civic virtue survived into the ratification debates over the Constitution.
39. "Does this advantage [of a republic over a democracy) consist in the substitution
of Representatives, whose enlightened views and virtuous sentiments render them superior to local prejudices, and to schemes of injustice? It will not be denied, that the Representation of the Union will be most likely to possess these requisite endowments."
THE FEDERALIST No. 10, at 64 (J. Madison) (J.Cooke ed. 1961). Note that Madison's use
of the phrase "most likely" indicates he understands that he is playing the odds.

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talks about the two strains from Harrington, civic virtue and structural restraints. Sensibly enough he is not prepared to rely upon
one to the exclusion of the other. On civic virtue he first expresses
the hope that a system of distance and indirect election will increase
the likelihood of selecting legislators who will be able to place the
common good over the special interests of factions. Thus the rules
for the election of the senators, with their long terms and appointment by state legislators, certainly are designed to keep the members of one house of Congress insulated from the popular pressures
of the day. Yet the fear of self-interest that moved Harrington (and
Locke) troubled Madison as well, for he knew full well that
"[e]nlightened statesmen will not always be at the helm."140 Civic
virtue is nice when you can get it, and in the long run a nation that
places a succession of fools and knaves in high places will not be
able to survive unscathed regardless of its constitutional structure.
But politics, as a game of playing the odds, is devoid of certainties.
The true test of government is how well, and how long, its institutions will be able to withstand the misdeeds of bad leaders in difficult times. Here Madison's hunch is the assertion that his
"extended republic" will be at a sufficient distance from the people
that it will be able to avoid the vices of excessive familiarity while not
being wholly aloof and uninformed about the needs and desires of
the public that it is obliged to protect.
In one sense Madison is very much like Hobbes. His basic account of the problem of factions is far more persuasive than his proposed cure, just as Hobbes's account of the state of nature is more
powerful than his monolithic solution. Madison may be right that,
over the full array of possible cases, distance is better than no distance. But this superiority translates itself only into the unhappy
conclusion that it takes the extended republic little more time to
decline into the popular despotism that he so fears. The gist of
Madison's difficulty is that the formal constraints of his extended
republic - complex representative government, working at a distance - are simply unequal to the challenge of the incessant pounding of self-interest. In a sense he probably knew the point as well as
anyone else, for so much of the rest of The FederalistPapersis directed
to identifying and justifying other limitations that the Constitution
imposes upon the federal government.
I too am unable to propose a set of foolproof institutional arrangements, so I shall content myself with pointing out the real
shortcomings in Madison's conception, treating for the moment The
FederalistNo. 10 as a self-contained essay, and not as a constituent
part of a larger work. In making these remarks, I should not be
understood as being critical of any effort to decentralize power by
placing it in the hands of many different sovereigns as federalism
requires.4 1 Even though important mistakes in allocation can and
40. Id. at 60.
41. I discuss some of these points in far greater depth in Epstein, The Proper Scope of
the Commerce Clause, 73 VA. L. REv 1387 (1987).

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will be made, on balance I believe that the fragmentation of power

under federalism is worth pursuing. (State governments, for example, are effectively limited in their taxing policies because of the fear
that heavily taxed individuals will move to other states.) But all that
said, it is still useful to explain why in The FederalistNo. 10 Madison
underestimates the strength of the obstacles that any viable system
of government, even an extended and complex republic, must
overcome.
One problem is that it is extremely difficult in the abstract to
make, once and for all, intelligent across-the-board judgments as to
which size of government will be the most resistant to the pressures
of factions and self-interest. In order to choose between national
and state governments, it is probably essential to have some detailed
knowledge of the social agenda and the relative strength of the interest groups as they operate at both the national and state levels.
Local governments do terribly on zoning issues, for example, because parochial interests do not register the preferences or welfare
of nonvoters who would like to become part of the system. One
typical zoning situation pits the owners of developed land against
the owners of undeveloped land. Owing to the mismatch between
property holdings and political power, the undeveloped land often
is kept in that condition by local rules, imposing capital losses on its
owners and the loss of contractual opportunities upon its potential
purchasers. Although local governments know most about land use
questions, they are most likely to misuse the information they have.
By the same token national regulation of agriculture and labor
is more dangerous than local regulation because it is capable of
cartelizing the relevant markets in a way that state regulation cannot. Although local regulation avoids the cartel problem, it may
well set in motion large pressures to subsidize those industries that
are faced with extensive competition from without, and only a detailed knowledge of the local political alliances can predict whether
these efforts to obtain subsidies will succeed or fail. The problem,
stated succinctly, is that the capacity to do good by legislation, say,
zoning, depends upon the same control and knowledge that impart
to government the power to do evil - making it difficult, if not impossible, in the abstract to identify which level of government
promises the greatest net gain.
Second, the choice of the correct level of government is likely to
be sensitive to the highly variable distribution of voting strength at
state and federal levels. It may well be that members of a certain
race or religion have sufficient clout to protect themselves at a local
level, but find their strength diluted when issues are voted on at the
national level. The most obvious illustrations here come from modem labor law, where there is no a priori judgment (independent,
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165

say, of the knowledge of the composition of the labor force) whether

42
a large or small bargaining unit will favor management or labor.
Neither side can make the appropriate judgment until it can make
intelligent estimates of its strength as it moves from smaller to
larger bargaining units. A small unit may give one side a clear majority; a larger unit may place it at greater risk but promise it greater
43
benefits if successful. Which to choose is no easy issue.
So too in politics the very variation in the political constituencies
often leaves the issue radically underdetermined. Anticommunist
zealots may fare better at the national level while religious zealots
may fare better at the state level. McCarthyism was a federal phenomenon and segregation was a state, or regional, phenomenon.
How should one expect otherwise? Madison does not talk in the
language of cost and benefit congenial to modem analysis. Nonetheless the formation of coalitions depends largely on whether the
anticipated cost of their organization is less, or greater, than the private gains that they are able to generate for their members. On that
question, geography and the logic of the extended republic play
some role, but a relatively secondary one whose importance has diminished over time, in ways that Madison could not possibly have
foreseen, with improved transportation and communication.
The second weakness in Madison's formulation is that he ignores
the "unravelling problem." Even under the best of circumstances
all members of the legislature will not be virtuous. The law of large
numbers alone precludes such a result, and the vagaries of collective
decisionmaking vastly increase the attendant risks. It will therefore
often arise that measures will be proposed that respond to the selfinterests of minorities that may be able to pull the wool over the
eyes of some neutral, less-informed legislators. Now virtuous legislators are faced with an unpleasant, "second best" choice. Given
that other legislators have misbehaved, what should they do? One
alternative is to imitate Socrates and remain firm in the face of temptation, at which point the gains that the bad legislators achieve will
remain unchallenged. Some might take this heroic stance, but
others clearly will not. Instead they will say: "We're willing to believe in tit for tat. We played the game fairly at first. But if they are
going to cheat, then we have to take measures to protect our own
constituents, if only in self-defense. Besides, if we do nothing in
response, they will learn that crime pays and try to outmaneuver us
again sometime in the future."
The moment some people say this, there is a destructive race to
the bottom, for others who are prepared to play it straight when
there are only a small number of defections will find themselves
42. See generally Leslie, Labor BargainingUnits, 70 VA. L. REv. 353 (1984) (exploring
the criteria used by the National Labor Relations Board in determining what constitutes
an appropriate bargaining unit and proposing a "framework" for future analyses of bargaining unit policy).
43. For a discussion, see Freed, Polsby & Spitzer, Lnions, Fairness,and the Conundrums
of Collective Choice, 56 S. GAL. L. REv. 461 (1982).
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drawn into the factional fray once the number of defections increases. The best any system of politics can generate is a world in
which some legislators will seek factional gains regardless of what
others do, where others seek factional gains only if some people
have done so first, where still others will do so only if many others
have done so before them, and so forth. Yet given that all too plausible distribution, it should take only a little time before each legislator has to act out of narrow self-interest to keep up with his rivals.
Because each legislator has to determine for himself whether others
have misbehaved, it is quite unlikely that all legislators will hew to
the virtuous line.
Legislatures are quite unlike ordinary product markets. There the
shifty player will be excluded over time as other traders will look
elsewhere for honest partners. But in politics no one can be ignored because simple two-party contracts do not pass laws. Instead
laws are common pool assets whose stability is as fragile as that of
the common pools in oil and gas and water rights. 44 The pressures
on virtuous legislators in a system of majority rule over time should
prove very strong indeed. Complex systems of voting at a distance,
then, suffer the same fate as the rule of law. They clearly are indispensable in any system of government, but they are hardly sufficient
to control the array of pressures that modem political markets can
generate. The pessimism of the dogged Hobbesian is not displaced
by Madison's institutional arrangements.
IV. Controlling the Factions
The question then arises; what other elements are needed to improve the situation? Here it is puzzling that Madison in his effort to
defend the extended republic did not mention in The Federalist No.
10 a number of features found in our Constitution that help to
dampen the influence of factions. Thus in the original Constitution
there was the indirect election of senators on staggered six-year
terms, which could work to weaken the connection between popular
sentiment and senatorial behavior. The sentiments of a given moment could never allow the electorate at a single time to constitute a
majority of one house of Congress. Yet by the same token the constant reelection of the House of Representatives means that no legislation can pass unless it has also the support of legislators just
recently elected. The need to go through two filters, both the
Senate and the House, can only slow down legislation, a sensible
rule when the risk of too much legislation is thought greater than
44. For a discussion of these issues, see Epstein, Why Restrain Alienation?, 85 COLUM.

L. REV. 970 (1985).

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the risk of too little.4 5

Our constitutional checks against legislative majorities are further
strengthened by the legislative veto vested in the president, without
whose agreement simple majorities in both houses cannot pass a
law. Here the constraint is even more powerful than it looks at first
instance, because the electoral incentives for choosing a president
are not the same as those for choosing a senator or a representative.
One might choose the senator or representative in the hope that he
can play the political game in ways that help his own constituents. If

there is a political pie to be divided, the good senator sees that his
constituents get at least their fair share, and perhaps a little more.
Senators (even before direct elections) and congressmen therefore
are not chosen for their skill in putting brakes on the total level of
federal spending and regulation. But citizens who want a favorable
division of the political pie may also want to have a smaller pie to
divide in the first place, and therefore they could also vote for a
president who is more conservative (that is, who believes in a
smaller federal government). If senators and representatives are
chosen because they play the factional game well, presidents could
be chosen because they reduce the stakes for which the game is
played. The same voters therefore, often will have different preference functions for different offices, which makes it more difficult for
factions to operate.
The system of enumerated powers, also not discussed by Madison
in The Federalist No. 10, worked in the same direction until it was
overrun by the extravagant interpretations given to the commerce
clause by the decisions of the post-1987 New Deal Court.46 But
faithfully enforced, it is an important part of the total political equation. The power of factions to operate depends upon the gains that
faction members can hope to achieve through political action.
Where structural devices limit the returns to factional behavior, we
should expect to see fewer factions form. Where certain objects are
kept from the political process at the federal level, legislators have
fewer degrees of freedom over which they can deal. Just as the complex voting rules raise the costs of forming a coalition, so too the
respect for enumerated powers tends to limit the gains that any successful coalition can achieve.
These safeguards against factions are hardly perfect. Indeed as
45. Again the intuition here is quite strong. If there are certain public-interest-type
statutes that benefit everyone, for example, statutes of limitation, they will pass under

very stringent voting rules. Factional legislation will not command such broad support,
so that the additional constraints are more likely to trap it than public interest statutes.
46. See, e.g., Wickard v. Filburn, 317 U.S. 111 (1942) (stating that farm products
produced for home consumption are subject to federal regulation where they affect the
quantity of goods in interstate commerce); United States v. Darby, 312 U.S. 100 (1941)
(upholding regulation by Congress of the production of goods that manufacturers intend or expect to move in interstate commerce, regardless of whether those goods are
actually shipped in interstate commerce); NLRB v. Jones & Laughlin Steel Corp., 301
U.S. I (1937) (holding that the National Labor Relations Board was justified in controlling industrial employee/employer relationships in order to prevent a burden on or obstruction of interstate commerce).

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the administrative power of the state grows, the benefits of coalition

increase, for, as noted, the greater ease of communication and travel
may well reduce the costs of forming coalitions. The political process, with its jurisdictional limitations, can help meet the question of
factions. But it cannot curb it entirely.
In this context, the most striking feature of The FederalistNo. 10 is
that nowhere does it discuss judicial review, which surely acts as a
bulwark against factional behavior. Short ofjudicial review, the only
recourse that disappointed citizens have against legislative excesses
is what Locke called the "appeal to heaven" 47 and we call "the
streets." Yet often desperate gambles will fail, so that they will not
be taken at all, as individuals who have lost on one important issue
will suffer their losses in silence rather than risk the greater losses of
armed resistance.
Judicial review offers a way to reduce this risk by providing a forum in which the. citizen can challenge a single bad decision of the
state without having to place at risk all the benefits of citizenship,
personal and economic, under the social contract. The possibility
that judicial nullification will strike down certain unjust laws reduces
the likelihood of their passage in the first place because again it
reduces the expected return from political behavior. The system
therefore has another round of defenses against bad legislation built
into it from the outset.
But lest one extravagantly praise judicial review as the highest
manifestation of the rule of law, much depends upon the substantive
rights that are protected under the Constitution. Here we are fortunate that the Bill of Rights, whatever its imperfections, does better
on this score than an immense mass of constitutions that we could
easily conceive. As there is no space to address the full range of
provisions, let me dose with just a few words about the one protection to which I have given the greatest attention, the clause of the
Fifth Amendment that provides: "nor shall private property be
taken for public use, without just compensation." 48 The one point
that I want to mention about this clause is the pressure that it places
upon legislators when they wish to take property for public use. In a
world in which legislators had perfect knowledge and perfect public
spirit, there would be little reason to have a compensation requirement built into a constitution. 49 Virtuous legislators with perfect
47. J. LoCKE, supra note 87, second treatise, ch. 19.
48. See R. EPSTEIN, supra note 30; Epstein, Takings: Descent and Resurrection, 1987 Sup.
CT. REv. - (forthcoming 1988).
49. See Kaplow, An Economic Analysis of Legal Transitions,99 HARv. L. REv. 511 (1986)
(makingjust this argument about government in support of a regime that sharply limits
the compensation that government must tender when it changes legal regimes). Start
with Madison's assumption about factions and legislative misbehavior, and the presumption about compensation quickly reverses itself.

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169

knowledge would take property only where they believed that the
gain to the rest of society would exceed the losses to the individual
property owner. That person in turn could protect himself against
unanticipated loss, if he so desired, by the purchase of insurance in
the private market. The state would be spared the onerous task of
valuation, and this cost saving would redound to all.

The just compensation provision has long been thought to be one

of those principles of "natural justice" that no sound constitution
can do without. But it also has more pragmatic roots. If one recalls
the risks of self-interest and the imperfect information that motivated the cake game in Harrington, the explanation is not hard to
find. In many situations it is difficult to get good information about
the relative costs and benefits of various government activities. The
state that is required to compensate when it takes will have to answer to its political majorities when the property it condemns is
worth less than the cash it hands over to acquire it. Yet if it is required only to conduct some administrative hearing to determine
that the property condemned is worth more than it has paid, then it
will have a good deal more leeway before members of the public will
be upset about the condemnation decisions that leave them a net
winner (and force the losses upon the hapless individuals made to
bear the brunt of majority government action). It is just here that
the hostility that defenders of the rule of law have toward administrative discretion has its greatest intellectual and moral force, for the
persons asked to bear the brunt of government action will not be
chosen at random. There is always some degree of discretion where
a government builds a fort or a road. If no compensation is required, then clever legislators can combine personal revenge with
the provision of public goods by choosing the land of a political enemy as the site for the new fort or the new road. Once they are
required to pay just compensation that threat, although never fully
removed, is surely diminished. The constitutional requirement of
just compensation thus tries to make the taking of property for public use look less like the political struggle, and more like Harrington's cake game in which the party who cuts is not allowed, as it
were, to choose. That is the force of the disproportionate impact
test, as articulated by Justice Hugo Black: "The Fifth Amendment's
guarantee that private property shall not be taken for public use
without just compensation was designed to bar the government
from forcing some people alone to bear the burdens which, in all
fairness and justice, should be borne by the public as a whole." 50
Whether we use the metaphor of Harrington or the modern reformulation of justice Black, the moral is the same. It is easy to
conceive systems of condemnation that do not require just compen50. Armstrong v. United States, 364 U.S. 40, 49 (1960). The disproportionate impact test introduces the same incentive-compatible decision procedure found in Harrington's cake game. For a discussion of the test and its linkages to the "just
compensation" language of the Constitution, see R. EpsrmN, supra note 30, ch. 14, 20410.
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Epstein
THE GEORGE WASHINGTON LAW REVIEW

sation and yet conform to the requirements of a system of rule of

law. But once the question becomes, is this the best we can do, then
the rule of law is only a necessary and not a sufficient condition for
the just social state. So long as that one conclusion is kept firmly in
mind, we can recognize the achievements of any political system in
which the rule of law protects us from the ravages of arbitrary
power, without forgetting the enormous amount of substantive work
that has to be done even after the rule of law is firmly entrenched
and universally accepted.

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